Bionano Genomics, Inc. (NASDAQ:BNGO) H.C. Wainwright 24th Annual Global Investment Conference September 12, 2022 7:00 AM ET
Company Participants
Erik Holmlin – President and Chief Executive Officer
Conference Call Participants
Trevor Levy – H.C. Wainwright
Trevor Levy
Good afternoon, everyone. And thank you for joining the H.C. Wainwright 24th Annual Global Investment Hybrid Conference. My name is Trevor Levy and I’m on the Corporate Access Team at HC Wainwright. While we are hybrid this year, we’re confident we’re going to be able to provide value to you with over 550 companies presenting at this conference. H.C. Wainwright is a full service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. We have a total of 26 publishing senior analysts and 643 companies covered across all sectors. Please visit hcwco.com for more information. The in-person venue for the event is the Lotte New York Palace Hotel in New York City. Virtual participation will be staged simultaneously with company presentations scheduled as live feed and available on demand. Please join us for one-on-one meetings, corporate presentations and panels that will be available live and streaming from September 12th through the 14th.
With that said, have a productive and enjoyable day. And I’d like to introduce our presenter. Please welcome Erik Holmlin, the President and CEO of Bionano Genomics.
Erik Holmlin
Awesome. Thank you, Trevor. I appreciate the introduction and thank you to everybody at H.C. Wainwright for the invitation and an opportunity to participate in your conference and tell you about Bionano Genomics and what we’ve been up to lately in some of our incredible progress. So of course we will be making some forward-looking statements. And so I would refer everybody to our public filings available online. And I’d like to begin with just a short corporate summary, which is that Bionano Genomics is focused on leading a methodology for analysis of genome called optical genome mapping. We have an array of product offerings that cover this application and a growing installed base of our product. Our trailing 12 months revenues are $23.3 million as of June 30th and we have about $187 million in cash and cash equivalents through June 30th. Our team is based on an array of really outstanding experts throughout the field of genomics and in different areas of corporate leadership. And our Board includes some of the strongest leaders in the industry, both in genomics, fundamental basic, research, as well as clinical applications of different genomics methods. And so we’re excited to present to you our story today.
And what we’re focused on is bringing this methodology called optical genome mapping, or OGM into the genomic space with a specific focus on the analysis of genome structure. And when we look at genomics and what’s been going on there over the past two decades of this century, we know about the incredible advancements of next generation sequencing, which of course began with the microarray and all of the different industries and companies, incredible value creation that’s gone on. But there’s really a new frontier in the analysis of genomes. And that’s the analysis of the genome structure and structural variation. And that might be a new term to a lot of investors that are looking at genomics, who are thinking about sequence variants, but structural variation is actually incredibly important. It refers to changes in chromosomal structure of that involve thousands or even hundreds of thousands or millions of nucleotides changing place in some form of variant called a deletion or translocation or insertion, or sometimes they’re repetitions or inversions.
And it turns out that structural variation is something that’s at the basis of the analysis in the clinical setting for essentially every patient that’s undergoing analysis for a genetic disease or cancer. And of course that’s the case because all of these medical societies recommend structural variation analysis. So it might be a new term, but it’s the fundamental basis of genetic analysis through major disease classes. One of the reasons is that the terminology feels new is that historically there’s really been no platform capable of broad, comprehensive analysis of genome structure. In fact, the traditional cytogenetic methods that have been relied upon for this approach are multiple: karyotyping; microarray, which is one of the more modern; fluorescence in situ hybridization; and other gene-based analyses. These make up multiple techniques relying on legacy methods that are relatively cumbersome and difficult to apply.
In fact, sequencers, which have been driving a lot of the modern analysis in genomics can’t reliably detect these structural variants. And so this is the backdrop of where we created something called optical genome mapping, which is a technique that makes structural variation analysis widely accessible. And it is outlined on this slide here. It goes from sample, blood, bone marrow aspirate, cells, cancer cells, tissue, many different cell types that are used in research or different analytical methods and goes through a series of steps to isolate ultra-high molecular weight DNA, label it up with different molecular biology techniques. And then our secret sauce is the linearization of these labeled molecules. And so we linearize these very long fragments, image them inside, DNA nano channels. And this creates a digital image of the genome, which is, analyze using software, which reveals the genome variations to any researcher seeking to analyze them.
And the researchers use this platform called the Saphyr system and our proprietary software called NxClinical together to reveal structural variations that describe the impact of that genome variation on subjects of research in disease, whether that’s genetic diseases, cancer. The cancer can be a solid tumor such as colon cancer or lung cancer or brain cancer, or it could be a hematologic malignancy like leukemia or lymphoma. And so these researchers would use this platform throughout these arenas to identify structural variations that are driving the disease and may form the basis of new diagnostic tests or new therapeutic targets that are the basis of a new therapy that gets developed by a pharmaceutical company.
There are other applications in areas of cell bioprocessing for gene editing or other applications within cell bioprocessing. So a very wide array of utility for optical genome mapping.
What we sell to customers is outlined here. We have a three-pronged go-to-market strategy, which involves sales of optical genome mapping systems, our proprietary software, and then of course, different versions of testing and laboratory services. When we compare our method optical genome mapping to sequencing what we see is that it’s really the only comprehensive solution for structural variation and analysis, identifying events that are larger than a few hundred or a few thousand base pairs and getting down to very low abundance or what we call cell fraction or variant allele fraction. So, sequencing in general is very poor at picking up these large structural variants, and especially challenged in doing so when those structural variants are present in a relatively limited or low abundance in the sample. And this is actually really important because in cancer, the structural variant that’s present is likely to be there in a relatively small number of the overall fraction of cells.
Not only can optical genome mapping pick up these events reliably, but it does so at high throughput, and does so at very low cost. And so what you see in this comparison against sequencing is that the really most powerful combination of molecular biology tools for analysis of genome variation is the combination of sequencing for sequence variants and optical genome mapping for structural variants.
Now, historically, what’s been used to get at the structural variants is this combination of three or four different techniques karyotype, fluorescence in situ hybridization or FISH, chromosomal microarray analysis or CMA, and then Southern blot to look at the repeat expansion and contractions. And what you see illustrated here is that optical genome mapping really provides a one-stop shop for complete comprehensive structural variation analysis that historically has required three or four different techniques.
And so this methodology is very valuable in platform consolidation, which generates labor release and different forms of economic value to end users who adopt it. And in fact, the side by side comparison of optical genome mapping against either the standard-of-care or as a complement to sequencing has now been conducted and widely published. And you can see that there are some common themes throughout these publications that are really compelling the adoption of this approach. So it’s a single assay for structural variation detection versus the three to five used traditionally. The time to results is substantially faster. And so you’re typically seeing results in days, which when karyotyping is used requires weeks, historically, substantially lower cost overall. So some of these papers have published that the cost of using optical genome mapping can be as little as half of the cost of the traditional methods and sometimes even better cost efficiency overall.
Optical genome mapping also offers higher resolution than the traditional techniques offer. So, not only can it pick up everything that these classical methods pick up, but it picks up more. And so the impact of seeing more is that actually more subjects have pathogenic findings. And so the overall success rate in a lab is higher. Traditionally, the existing methods only pick up pathogenic results in 30% to 50% of the subjects that are being analyzed. And so what these publications are showing is that optical genome mapping adds another 15% to 20% to the classical methods. And this is very powerful for labs that are seeking to see more and optimize their workflow. These are all of the compelling reasons that are now published and driving the adoption.
And so when we look at the market potential for these incredible capabilities, what we see is that it ranges from somewhere between $2.8 billion to $4.2 billion, driven by millions of samples being analyzed by traditional cytogenetic methods. We would expect to convert those over to the optical genome mapping methods, and then complementing the sequencing. We know how powerful sequencing is. But if sequencing cannot see the whole story in terms of genome variation, optical genome mapping is really a very elegant complement to the sequencing that’s going on a worldwide basis. And there are some 15,000 sequencers out there. So we envision the development of a very broad, wide ranging installed base of optical genome mappers, and that they would run through millions of samples on an annual basis, which is what gives rise to this almost $4 billion, $4.5 billion potential market.
And we see areas where there would be even more samples to drive more utilization of optical genome mapping. And this slide lists some of those. So population screening; newborn screening; cell bioprocessing, as we talked about; even liquid biopsy analysis, somewhere in the future. And so the market potential for optical genome mapping is substantial today, and it is expected to grow over time.
When we look at some of the historical performance of Bionano, our sales have been growing very consistently over the last couple of years. And so, as I mentioned, the trailing 12 month revenues as of the end of the second quarter in 2022 was $23.3 million. We had 196 of our genome mappers installed on a worldwide basis and our revenues for the second quarter of 2022 were $6.7 million, which was a record for us in any quarter ever. And so the business is on a positive growth trajectory and we’re very excited about the progress that we’ve been making.
And we’ve been following a long term growth strategy that’s really based on these five key pillars, which is to continue to drive commercial traction and commercial validation of optical genome mapping through the growth and proliferation of our mappers in the increasing installed base to really deliver powerful, useful and robust products to our end users, to be focused on clearing the path for reimbursement for tests that would be based on optical genome mapping through the application for different reimbursement codes and other aspects of driving reimbursement on a global basis, advancing our products by increasing their throughput, increasing the utility in different sample types and indications. And by doing so, we expect to be able to enter new markets such as the higher throughput analysis market and markets that are requiring sample types that we don’t currently support or markets that require automation. And then lastly, making software a strategic driver of our market penetration and optical genome mapping solutions.
When we look at some of the catalysts of future growth, we’ve outlined those in our milestones for our growth strategy, which we call ELEVATE! Over the course of the first half, we had a number of milestones that were tied to CPT code, applications which we achieved, and different progress in an area of market development that’s focused on generating clinical data and through clinical trials and different clinical studies. Through the second half, we’re focused on growing our installed base by the end of the year to 240 systems. I mentioned that we had reached 196 through the first half. And so we’re on track we believe to get to 240 systems by the end of the year.
We have a number of product launches that are planned, that include a version of our NxClinical software that addresses OGM data together with its powerful capability of analyzing sequence variants and other copy number variants. We have a CLIA lab that will be launching OGM tests over the course of the second half of the year as a tool to drive more product development or product adoption I should say, as well as other aspects of new product development, especially in the area of a new optical genome mapper, which will be high throughput, and other progress in our clinical studies.
Now in the first half of 2023, we expect the commercial launch of our new high throughput optical genome mapper, as well as a Strategy Day to discuss development of our long-range plan, which we’ll be sharing with the investment and analyst community sometime early in the first part of 2023.
So I want to conclude by thanking everybody for following along Bionano, and tuning into this presentation as part of the H.C. Wainwright Conference. And we look forward to hearing from you and hopefully meeting some of you during the one-on-one portion of this meeting. Thank you very much for your time today.
Trevor Levy
Thank you, Erik. Also I want to thank all of our presenters for taking part in what has been a very productive and informative series of presentations. We appreciate the time and effort that went into preparing them, and are very grateful for your flexibility and your presence at our conference this year. Thank you again from the H.C. Wainwright team.
Question-and-Answer Session
End of Q&A
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